Investments by governments to support research and development are crucial to economic prosperity, job creation, scientific advancement, and improvements to the future to be inherited by children. How should these investments be selected?

  • Merit review is a competitive process leveraging the expertise of a specially qualified panel to direct investments in research and development.
  • Earmarks are appropriations given to specific recipients or targeted areas, without competition, to satisfy the intent of government.

When viewed over the time scale on which benefits of research occur (decades), the merit review process is the better strategy. When viewed over the time scale of election cycles (years), governments often consider earmarks to be the better strategy. Visionary governments who followed the advice of scientists like Francis Bacon and Vannevar Bush built research systems that spawned the industrial revolution, the space and electronics industries, the internet, …. Canadian governments of the past who listened to John Charles Fields and Maurice Lamontaigne launched Canadian industries through the NRC and NSERC.

“The wealth of a nation once depended on its natural resources or the sheer size of its land, or its potential labour force; but now it is coming to depend more on its reservoirs of knowledge and its ability to organize and utilize them than on the older criteria.” –A Science Policy for Canada, Lamontagne Report, v. 3, (1976)

(Concerning the allocation of research funds) “It is folly to use as one’s guide in the selection of fundamental science the criterion of utility. Not because (scientists)… despise utility. But because. .. useful outcomes are best identified after the making of discoveries, rather than before.” — John Polanyi, Speech to the Canadian Society for the Weizmann Institute of Science, Toronto (1996-06-02)

“Faced with the admitted difficulty of managing the creative process, we are doubling our efforts to do so. Is this because science has failed to deliver, having given us nothing more than nuclear power, penicillin, space travel, genetic engineering, transistors, and superconductors? Or is it because governments everywhere regard as a reproach activities they cannot advantageously control? They felt that way about the marketplace for goods, but trillions of wasted dollars later, they have come to recognize the efficiency of this self-regulating system. Not so, however, with the marketplace for ideas.” — John Polanyi, Quoted in Martin Moskovits (ed.), Science and Society, the John C. Polanyi Nobel Lareates Lectures (1995)

Instead of listening to today’s voice along this lineage, John Polanyi, Canada’s current federal1 government listens to Dean Roger Martin.

“What makes a country prosperous is not investment in science and technology. It is businesses producing high paying jobs by having unique products and processes that a customer needs.” — Roger Martin, Canada will shrivel under business-school neglect, dean says , The Globe and Mail (2011-03-16)

Canada, like Texas, doesn’t shrivel.

The report of the expert panel, the “Jenkins Report”, advising the government on the effectiveness of federal support of business research and development recommended2 the creation of a new Industrial Research and Innovation Council (IRIC) and separately recommended3 that the NRC be ramified “into a constellation” of new R&D centres, a natural progression following the birth of the Tri-council. Rather than constellating the NRC, Budget 2012 does the opposite with plans for the role of the proposed IRIC to be carried out by a more centralized, business-focused, NRC:

…the Government will consider ways to better focus the National Research Council on demand-driven research, consistent with the recommendations
of the Expert Panel. – Budget 2012

The policy implementations of Budget 2012 for CIHR, NSERC, SSHRC will be announced today in a meeting to Vice Presidents [Research] of Canadian universities. Drifting along a decade-long trend, a transfer of funds away from research investment programs distributed through competitive merit review toward new programs aimed at business recipients without competitive review is anticipated. Canadian business innovation gaps will not be solved by cutting funds supporting academic research and education activities.

The wisest investment strategy of federal dollars should rest upon systems involving the best expertise and considerations of the disruptive impact of basic research.


  1. The current government of Ontario is similar: after earmarking \$50M to the Perimeter Institute in 2011, \$42M was cut out of research in 2012.
  2. “Recommendation 1: Create an Industrial Research and Innovation Council (IRIC), with a clear business innovation mandate (including delivery of business-facing innovation programs, development of a business innovation talent strategy, and other duties over time), and enhance the impact of programs through consolidation and improved whole-of-government evaluation.”
  3. “Recommendation 4: Transform the institutes of the National Research Council (NRC) into a constellation of large-scale, sectoral collaborative R&D centres involving business, the university sector and the provinces, while transferring NRC public policy-related research activity to the appropriate federal agencies.”



Innovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society. Innovation differs from invention in that innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself.”

Dean Roger Martin of the Rotman School of Business, an iThinker pondering Canada’s innovation gap, writes in a recent op-ed piece that

“The first lesson is that commercial success and impact is more about innovation than about invention. Invention is the creation of some new-to-the-world technology, molecule, material, or formula. It is typically the product of the curiosity of a scientist. It can be pretty earth-shattering when it is electricity or insulin. But it can be pretty irrelevant when it is a technology in search of a user.”

The laser, created by scientist inventors A. Schawlow and C. Townes at Bell Labs, was dismissed as “a solution looking for a problem.” Eventually, this seemingly irrelevant technology found applications in fiber optic communications systems, in semiconductor device fabrication and in powerpoint presentations at leading business schools worldwide. Bell Labs invested heavily in curiosity driven basic research by scientists. Scientist inventors, free to pursue their potentially irrelevant curiosities, eventually produced important technologies:

These inventions by scientists are the foundational elements Mr. Jobs “cobbled together to make the Macintosh, iPod, iPhone and iPod”. Without them, Apple’s innovative product line would simply not exist.

Basic scientific research is the soil in which innovation grows.



Dean Roger Martin’s remarks in the Globe and Mail yesterday threaten Canada’s intellectual infrastructure and therefore merit the attention of all Canadians, especially policymakers planning the upcoming federal budget and researchers in Canada’s universities. Amazingly, he asserts:

“What makes a country prosperous is not investment in science and technology.  It is businesses producing high paying jobs by having unique products and processes that a customer needs.”

Who does he think creates those products and processes?  Business majors?  His observation will come as a shock to the Chinese, who are working hard to build a competitive modern economy by investing heavily their research resources in the basic sciences and engineering in their universities, not in business schools.  They know these investments will create the industries of the future, just as they have for the west in the past.  What is amazing about Martin’s claim is that virtually all of the “high paying jobs” in industries with “unique products and processes” – those leading edge industries like communications technology, pharmaceuticals, bio-technology, etc. that Martin so casually dismisses, have products that are the result of investment in university-based research in science and technology.  In the United States, Silicon Valley, which houses many of the companies he says are now led by CEOs with business degrees, was created by scientists and engineers from Stanford and the University of California.  Indeed, it would be difficult to identify a single industry today that was not based on a scientific or technological innovation of the past.  Business does not create business; creative innovation creates business.

New Rotman Building
After claiming that Canadian business schools are broke ($200M Campaign, New building), Martin cites statistics comparing the percentage of students in a discipline versus the percentage of tri-council research funding given to that discipline. Martin argues that the percentage of students in a discipline should equal (or at least influence) the percentage of tri-council funding given to that discipline. This is a terrible idea. Martin appeals here to the value of fairness (“In business….it’s a 10 to 1 cut”). If taken seriously, Martin’s reallocation plan restricts policymakers from defining the government’s research investment portfolio; it prevents them from making targeted investment decisions. The plan potentially forces money to be poured into disciplines which happen to be popular with undergraduates at the time (whether frivolous or not). Science policy should not be determined by a popularity contest among undergraduate major choices. I prefer the old ways to think: scientifically, strategically.

Roger Martin’s viewpoint will hurt Canada in the short and long term if taken seriously now. Basic scientific research has produced (among other things):

  • electricity (why you aren’t in the dark, can take an elevator in a high rise, and have clean laundry)
  • vaccines (partly why you are not already dead)
  • transistors (performing the basic functions on which computers are built, enabling the internet)
  • encryption (why you can safely make financial transactions online and make other secure communications)
  • combustion engines (how your car generates power for motion)
  • financial derivatives (so that insurance companies and banks can prepare for risks)
  • search engines (how we manage information overload on the internet)

What percentage of the workforce relies on these developments? In contrast, what basic elements of the modern economy can be attributed to MBAs? (Perhaps MBAs can claim to have invented mortgage backed securities and credit default swaps leading to to the financial meltdown of 2008- 2009?)

Martin highlights a list of technology companies (Hewlett-Packard, IBM, Microsoft, Apple, Cisco and Intel) and reports that many of their CEOs have MBAs. Look up the history of these companies and you will find:

MBA CEOs may find efficient ways to bring widgets to the market and make a profit in the process. But the widgets are invented by scientists and engineers through basic research targeting science and engineering, not business education or business research.  Business majors and MBAs are important in the operations of businesses that create new products, so business education is important.  But to suggest that it is primarily responsible for new products and innovations creating business is just plain wrong. Misconceptions about the impact and role of basic research funding by business leaders may be one of the largest obstructions currently contributing to Canada’s innovation gap.

The challenges we face in Canada, and as human beings on earth, require new ideas. The long research lines of science (pioneered by Galileo, Newton, Gauss, Euler, Darwin, Riemann, Einstein, Curie, Schrödinger,…,Banting, Polanyi,…) have consistently produced innovation and prosperity, and therefore merit vigorous and consistent government funding.